One of the highest gainers in the Indian Government’s push for digitisation of payments has been the eCommerce sector. India has one of the fastest-growing eCommerce markets in the entire world.
The proliferation of smartphones and affordable internet has widened the scope of online businesses. The COVID-19 induced pandemic further prompted many traditional businesses to move onto the digital space, jostling with existing eCommerce players for a piece of the pie.
The growing market for online goods and services has necessitated a demand for modern, easy and convenient payment options.
Let’s look at some of the eCommerce Payment trends that have emerged:
- In-store Payments :
There has been considerable growth in the adoption of digital payment practices by offline small and medium-size merchants. Unified Payments Interface (UPI) has emerged as the most preferred choice of payment among offline stores.
Players like Google Pay, PhonePe, and PayTM have gained immensely from the shift, mostly in Tier-1 cities in India.
Further, the emergence of ePOS or Mobile POS eliminates the need for a physical POS terminal, thereby enabling merchants to take their business concerts, trade shows and events where there is demand for their goods or services.
- Online Payment :
With the growth of online shopping platforms in India and as more and more people begin using them to make their purchases, it also increases the adoption of newer methods of payments.
Additionally, even local brick and mortar stores are getting into the digital shopping space with the help of players like JioMart and Amazon.
This growing demand for online payment solutions provides opportunities for companies to come up with new products to enable the merchants to send links for payments, reminders and other services.
- Buy Now Pay Later :
The Buy Now Pay Later option gives shoppers the power to buy goods and services at the moment and make payments in affordable instalments over time.
Almost all online shopping platforms have the option of making the payment through EMI, using credit cards. Some POS players allow their customers to convert their purchase into EMI at the time of checkout online or on their mobile without the need for a credit card.
The Buy Now Pay Later is a boon for most middle-class customers who prefer to make payments for big-ticket purchases through easy and affordable instalments.
- Growth in Payments with QR Code :
Lots of players like Paytm, PhonePe, Google Pay, Bharat Pe, PineLab etc., have gained from the success of payment acceptance through UPI. Consumers can just scan a QR code and make their payment through their bank account or online wallet.
This segment is still largely unexplored and will see huge growth in the near future. The tier-2 and tier-3 cities are completely untapped and there is a great opportunity to push cashless payment options in those areas.
- Cash on Delivery :
Before the influx of various digital payment platforms, the growth of eCommerce in India was fuelled by Cash on Delivery (COD) payments. The majority of customers were reluctant to make an online payment due to online fraud risks and COD seemed a safer option.
Even though digital payments have now been gaining popularity, Cash on Delivery has still remained a very popular mode of payment among shoppers.
Many merchants offer a variety of payment options to their customers, including COD.
- Payment in Public Transport :
Digital services have received a big boost during and post-COVID 19. Many countries around the globe have adopted digital practices and it has been so in India, as well.
Most prominent among them have been individual ticket sales. There are now apps through which you can book train, bus and metro tickets which eliminates the need to stand in queue and you can simply flash the smartphone at the terminal to gain access or exit.
Toll collection has been digitised and FASTag has been made mandatory for all vehicles.
- Card Payments :
Payment through card is currently the most-used method to pay online. RuPay is India’s indigenous debit and credit card payment scheme and has wide acceptance across the country.
Spending volumes across all card brands declined during the COVID-19 pandemic, however, RuPay did comparatively well compared to international brands.
Card use is projected to decline gradually though and will be overtaken by digital wallets in the near future.
- Cryptocurrency :
Cryptocurrency is yet to have a legal framework to regulate and govern it in India. However, the world over there seems to be a growing acceptance of cryptocurrency as a mode of payment. Many big-name brands, like Tesla, Paypal and Xbox have begun to accept it as a valid form of payment.
As Cryptocurrency is decentralized, customers and merchants can transfer wealth between each other, without having to go through banks. It might not be long before Cryptocurrency gains acceptance as a cheaper and more efficient payment solution in India as well.
To sum it up
Payments in India have undergone sweeping changes in the last few years. India’s large and varied population presents a huge opportunity but also creates unique economic and cultural challenges.
New challenges will need new solutions and we will see potential innovation and better penetration and growth of digital payments in India. eCommerce payments will continue to evolve to provide better ease of transaction.
As a forward-looking organization, we believe these are the trends that will dominate the fintech landscape in 2022.